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Thread: Subscribers

  1. #1
    TSavery is offline
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    Subscribers

    I can already see the confusion happening, so I thought I would clarify the subscriber issue for readers. Some of this is due to overall street confusion, some to articles that have been written on the subject. First things firs. We have to understand terms:

    SUBSCRIBER - Any radio that the company has received a payment for. This includes self paying subscribers and subscribers in promotional periods.

    SELF PAYING SUBSCRIBER - Subscribers which are being paid for by the end user.

    PROMOTIONAL SUBSCRIBER - A subscriber that is in a subscription period paid for by either the OEM, or the company itself, but in no case is the end user paying the bill.

    PARKING LOT SUBSCRIBER - A term that was used to describe subscriptions that are in promotional periods, but not yet being utilized by the end user. This is actually a subset of the promotional subscriber. This subset typically applies to Chrysler and Ford. The company gets paid on a subscription at manufacture, and there is a period of time where the vehicle is on dealer lots, and still being counted as a subscriber. This is NOT a company metric and is NOT interchangeable with the term promotional subscribers.

    CHURN - A monthly measure of the deactivations vs. the total subscriber pool. This is ONLY a measure of self paying subscribers. If a promotional subscriber drops off the rolls, they are NOT counted in churn.

    FULLY LOADED CHURN - A measure of total deactivations as measured against the subscriber base. This metric is meant to take into consideration the deactivations of subscribers in promotional periods. This is NOT a company metric.

    With that out of the way, lets look at the subscriber picture:

    The company outlined that in the deactivations, a large number were attributable to the impact of promotional subscribers.

    "...net subscriber loss of approximately 400,000 since year-end, the company’s first quarter of negative net subscriber additions, was driven by a decline of approximately 300,000 subscriptions in paid promotional trials, reflecting the dramatic fall-off in North American auto sales. Self-pay subscriptions declined less than 1% in the quarter from 15.5 million to 15.4 million." - Sirius XM

    What the company is saying is that the GROSS number of additions was lower vs. the increased deactivations. They were saying that the gross number of promotional subscriber ADDITIONS was 300,000 lower, and NOT that 300,000 of the deactivations were parking lot subs as stated in a satwaves piece. This is important, because the subscriber issue will come up again in Q2, and people need to be thinking along the right path.

    "Taking a closer look at the subscriber totals that were reported by Sirius XM last week, we discover that out of the 400,000 subscribers lost in the first quarter of 2009, 300,000 of these were not truly subscribers at all, but rather "parking lot" subs." - Satwaves

    For clarity. Self paying churn also went up, as did fully loaded churn. The company took a 1% hit on self paying subs.

    One reason I discussed penetration rate in an earlier piece was that it is important to know the number of radios being supplied when considering that number. I think that most understand this aspect of the equation better now. The company has lowered the number of supplied chipsets to reflect the poor auto sales. This means that the number of promotional subs will decrease.

    To be clear, not one parking lot sub was lost in the quarter. Parking lot subs, by definition, are churn proof and deactivation proof. They are subscriptions that are awaiting an end user to apply the prepayment to for a set number of months.

    The company stated that they expect penetration to increase to the high 50's by the end of the year. This projection is based on an annualized car sales rate of 9,000,000. This is important to remember. Should car sales increase substantially, the penetration rate may stay the same. The company has to supply chipsets, and that takes time to happen.

    We are not trying to slam the work on satwaves, but feel that people need to have a good grasp of these numbers as well as how they are defined so that they use the right nomenclature going forward.

    Hope this helps end any confusion.
    Tyler Savery
    Satellite Standard Founder

  2. #2
    socalrunningfool is offline
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    Tyler.

    Great information on all levels this past week. Would really like to get my trading focused on the Shareholders meeting fast approaching. Would appreciate your views on the various items, especially the dilution issue in the future. Thank you again.

    Socal

  3. #3
    trippingthespeculatingpos is offline
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    boy socal thats a stupid question you just showed ur idiotness there, what a moron.

  4. #4
    TSavery is offline
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    To be clear....

    The miss with promotional subscribers was dealing with the gross subscriber number taking a hit. This meant that auto sales combined with lower production led to fewer gross additions.

    In other words, the supply bucket was more empty than in the past, and the self pay churn hole at the bottom of the bucket got slightly bigger. The promo churn hole (fully loaded churn) also got slightly bigger.
    Tyler Savery
    Satellite Standard Founder

  5. #5
    relmor2003 is offline
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    Thank you for this information Tyler. Above and beyond as usual.

  6. #6
    TSavery is offline
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    Quote Originally Posted by relmor2003 View Post
    Thank you for this information Tyler. Above and beyond as usual.
    relmor.....

    No problem. I can see where Sirius XM's statement may have confused people because they went from talking about deactivations to a decline in the gross additions because of fewer promotional period susbs.

    It was not that 300,000 of the 400,000 were promotional sub drops. It was that the promotional sub category declined by 300,000 and this lowered the gross number of additions.

    The fact was that the company churned out 1,743,000 subs vs. additions of 1,338,000. The 400,000 represents the delta.

    It is the "subscribers in promotional periods" that the 300,000 fewer is referring to. Simply stated, the OEM channel has slowed down substantially.

    The issue is more about a slowing supply line than it is about churn. Churn bumped up but was relativly stable and what was expected all things considered.

    If you note, when I did my PRE Q1 report, I pretty much hit the net additions on the head. I figured a slightly higher churn rate and arrived at a sub loss of 484,000. The company actually outperformed my churn slightly and beat my own expectations.

    The problem that oft happens is that people start making calculations with bad assumptions, or they misunderstand something that was reported.
    Tyler Savery
    Satellite Standard Founder

  7. #7
    bassmaster is offline
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    Quote Originally Posted by TSavery View Post
    relmor.....

    No problem. I can see where Sirius XM's statement may have confused people because they went from talking about deactivations to a decline in the gross additions because of fewer promotional period susbs.

    It was not that 300,000 of the 400,000 were promotional sub drops. It was that the promotional sub category declined by 300,000 and this lowered the gross number of additions.

    The fact was that the company churned out 1,743,000 subs vs. additions of 1,338,000. The 400,000 represents the delta.

    It is the "subscribers in promotional periods" that the 300,000 fewer is referring to. Simply stated, the OEM channel has slowed down substantially.

    The issue is more about a slowing supply line than it is about churn. Churn bumped up but was relativly stable and what was expected all things considered.

    If you note, when I did my PRE Q1 report, I pretty much hit the net additions on the head. I figured a slightly higher churn rate and arrived at a sub loss of 484,000. The company actually outperformed my churn slightly and beat my own expectations.

    The problem that oft happens is that people start making calculations with bad assumptions, or they misunderstand something that was reported.

    TYLER YOU'RE THE F*CKEN MAN!!!!!!!

    can you clear up the CAPEX issue? just wondering, if the next bird launch/es will hurt FCF being positive...ty

  8. #8
    PMO is offline
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    Angry Feedback from some subs in CNET Article

    http://news.cnet.com/8301-13645_3-10237152-47.html

    The comments to the reference article should be a wake up call to Sirius XM management.

    --Long SIRI

  9. #9
    relmor2003 is offline
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    Quote Originally Posted by TSavery View Post
    relmor.....

    No problem. I can see where Sirius XM's statement may have confused people because they went from talking about deactivations to a decline in the gross additions because of fewer promotional period susbs.

    It was not that 300,000 of the 400,000 were promotional sub drops. It was that the promotional sub category declined by 300,000 and this lowered the gross number of additions.

    The fact was that the company churned out 1,743,000 subs vs. additions of 1,338,000. The 400,000 represents the delta.

    It is the "subscribers in promotional periods" that the 300,000 fewer is referring to. Simply stated, the OEM channel has slowed down substantially.

    The issue is more about a slowing supply line than it is about churn. Churn bumped up but was relativly stable and what was expected all things considered.

    If you note, when I did my PRE Q1 report, I pretty much hit the net additions on the head. I figured a slightly higher churn rate and arrived at a sub loss of 484,000. The company actually outperformed my churn slightly and beat my own expectations.

    The problem that oft happens is that people start making calculations with bad assumptions, or they misunderstand something that was reported.
    My negligence, but I was never aware that a sub was counted when it was built and sent to the carmaker. That definately threw my numbers off. As did my believe that a sub didnt count until it was activated by the customer(promo sub). hence subs sitting in cars, and subs sitting on shelves would make auto sales slowing down hurt subs simply because they didnt need more radios. So you have less car sales from deals that didnt count the sub until the promo was activated, deals where its activated when the radio is installed, and deals the sub is activated simply by producing the radio. INSANE. No wonder my numbers were so far off. Now heres the kicker Tyler, WHY DID MILLER THE ANALYST agree with my dumb numbers. Is he as ignorant on how subs were counted as I was? I knew about promo subs vs. self pay, but I had no idea that promo subs have 55 different types that activated the sub count at 55 different times. Exaggerating a bit.

  10. #10
    socalrunningfool is offline
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    Quote Originally Posted by trippingthespeculatingpos View Post
    boy socal thats a stupid question you just showed ur idiotness there, what a moron.
    ------------------------------------------
    Trip. If you were anything other than a dumb ****. I'd actually spend more time with your sorry useless ass.

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